Silver Continues to Decline Due to Chinese Demand Concerns: Silver fell below $29 per ounce,
heading towards its lowest levels since mid-May,
as weak demand forecasts in China, the largest consumer, weakened investor sentiment.
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Japanese 10-Year Bond Yield Rises on Hawkish Bank of Japan Outlook
Japanese 10-year government bond yields rose to over 1.06%,
heading towards their highest levels in two weeks
amid increasing expectations that the Bank of Japan will raise interest rates again when it meets next week.
Toshimitsu Motegi, a senior official in the ruling party,
urged the Bank of Japan to communicate more clearly about its plan to normalize monetary policy through steady rate hikes,
adding that excessive yen depreciation negatively impacts the economy.
Prime Minister Fumio Kishida also stated that normalizing the central bank’s
monetary policy would support Japan’s transition to a growth-driven economy.
The Bank of Japan has been under constant pressure to tighten
policy to defend the yen and combat inflationary pressures.
Data last week showed that Japan’s core inflation rate remained unchanged at 2.8% in June,
while the underlying inflation rate rose to 2.6% from 2.5%.
Offshore Yuan Value Rises After People’s Bank of China Cuts Interest Rates
The offshore yuan rose to 7.29 against the dollar,
up from its lowest levels in more than two weeks as
investors continued to assess the effects of the latest interest rate cuts by the central bank on the economy.
The People’s Bank of China cut the one-year loan prime rate,
the benchmark for most corporate and household loans, by 10 basis points to 3.35%,
while the five-year rate, a reference for mortgages, was reduced by 10 basis points to 3.85%.
Despite concerns that lower interest rates might weaken the yuan,
experts believe the central bank can use tools like official guidance to prevent an uncontrolled decline in value.
Silver Continues to Decline Due to Chinese Demand Concerns
Silver fell below $29 per ounce, heading towards its lowest levels since mid-May,
as weak demand forecasts in China, the largest consumer, weakened investor sentiment.
The People’s Bank of China surprised markets by cutting key interest rates on Monday,
leading to record low loan rates of 3.35% for one year and 3.85% for five years.
The US Federal Reserve is also widely expected to start cutting interest rates in September,
which could increase the value of the white metal.
Silver surged sharply in the first half of the year
amid expectations that industrial demand from the clean energy sector would outstrip supply,
but the market has since retreated from these bets.
Silver Continues to Decline Due to Chinese Demand Concerns
